President Barack Obama has been unveiling new measures to help struggling US homeowners including refinancing their mortgages, as well as a student loan initiative.
Looking towards next year’s election Obama is on a campaign-style visit to western US states.
With Republicans in Congress blocking his jobs package the president is proposing moves to boost the economy that do not require congressional approval.
The mortgage refinancing initiative is being discussed in Nevada, a state hit hard by the housing crisis. The president is also in Colorado and California during the three-day trip.
The states on Obama’s tour were chosen deliberately. Each has large populations of Hispanics, a voting bloc Obama’s campaign is eager to win over.
Nevada and Colorado are “swing states” that alternate allegiance between Republicans and Democrats, making them valuable political prizes in presidential elections. Both could prove critical to Obama’s re-election effort.
He will use them as a backdrop to make his latest push to boost the weak economy, which remains the biggest obstacle to his hopes of retaining the presidency. According to a White House official, he will also try out a new slogan to put pressure on Congress: “We can’t wait.”
Housing is one area that has dogged Obama’s efforts to improve the economy. His administration has been working with the Federal Housing Finance Agency, the regulator for mortgage giants Fannie Mae and Freddie Mac, to find ways to make it easier for borrowers to switch to cheaper loans even if they have little to no equity in their homes.
Obama will highlight the result of that work during his Nevada stop: the FHFA intends to loosen the terms of the two-year-old Home Affordable Refinance Program (HARP), which helps borrowers who have been making mortgage payments on time but have not been able to refinance as their home values have dropped.
The government is also preparing to reduce loan fees that Fannie and Freddie charge and waive fees on borrowers that refinance into loans with shorter terms, according to an administration official.
Lenders could begin refinancing loans under the retooled programme as soon as the start of December, while loans that exceed the current limit of 125 percent of the property’s value will not be able to participate until early next year, according to a White House official.